Albany International BV v Stichting Bedrijfspensioenfonds Textielindustrie
| Albany BV v Stichting Bedrijfspensioenfonds Textielindustrie | |
|---|---|
| Court | European Court of Justice |
| Citations | (1999) C-67/96, [1999] ECR I-5751, [2000] 4 CMLR 446 |
| Court membership | |
| Judge sitting | Judge Rodriguez Iglesias |
| Keywords | |
| Competition law, labour rights, pensions | |
Albany International BV v Stichting Bedrijfspensioenfonds Textielindustrie (1999) C-67/96 is an EU law case, concerning the boundary between European labour law and European competition law in the European Union.
Facts
Albany International BV, a Dutch company, claimed that it should not be bound by a collective agreement to remain with a collective pension fund, as it alleged it was an "undertaking" that restricted competition. Albany BV was obliged by Dutch law to join a supplementary pension fund for workers within its industrial sector. Albany was in the industry pension (Stichting Bedrijfspensioenfonds Textielindustrie) since 1975. In 1981 it decided the pension was not generous enough. Albany BV entered into an arrangement providing enhanced benefits for its employees with an insurer. In 1989, the basis on which benefits under the compulsory scheme were paid out was improved, making it comparable with Albany’s private arrangement. Albany therefore applied to be exempted from affiliation to the fund. The fund refused Albany’s application and refused to follow the advice of the Insurance Board, requiring it to grant an exemption. The national court adopted the Board’s decision, but stayed proceedings pending a reference to the ECJ on whether the Fund was an undertaking within the meaning of the EC Treaty article 85 (now TFEU article 101), article 86 (now TFEU article 102) and article 90 (now TFEU article 106). If so, it also asked whether compulsory fund membership nullified the effectiveness of competition rules applicable to undertakings, and if not, whether there were circumstances which could render compulsory membership incompatible with article 90.
Judgment
The Court of Justice held that (1) agreements made in the context of collective negotiations between employers and employees in pursuit of recognised social policy objectives were not caught by TFEU article 101 because the purpose of competition law was not to affect collective agreements, rather than to regulate anti-competitive business practices. There was no difficulty in compulsory affiliation with a sectoral pension fund, and competition law had no application. The pension fund was engaged in an economic activity, even though it was not profit making. It held a dominant position under TFEU article 102 but this was justified given the basis of the scheme in social solidarity. The Dutch government was entitled to consider whether an alternative of laying down minimum pension requirements would meet levels of pension payments achieved by compulsory fund membership.
58 Under Article 4(1) and (2) of the Agreement, the dialogue between management and labour at Community level may lead, if they so desire, to contractual relations, including agreements, which will be implemented either in accordance with the procedures and practices specific to management and labour and the Member States, or, at the joint request of the signatory parties, by a Council decision on a proposal from the Commission.
59 It is beyond question that certain restrictions of competition are inherent in collective agreements between organisations representing employers and workers. However, the social policy objectives pursued by such agreements would be seriously undermined if management and labour were subject to Article 85(1) of the Treaty when seeking jointly to adopt measures to improve conditions of work and employment.
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77 It should be borne in mind that, in the context of competition law, the Court has held that the concept of an undertaking encompasses every entity engaged in an economic activity, regardless of the legal status of the entity and the way in which it is financed (see, in particular, Case C-41/90 Höfner and Elser [1991] ECR I-1979, paragraph 21; Poucet and Pistre, cited above, paragraph 17; and Fédération Française des Sociétés d'Assurance, cited above, paragraph 14).
78 Moreover, in Poucet and Pistre, cited above, the Court held that that concept did not encompass organisations charged with the management of certain compulsory social security schemes, based on the principle of solidarity. Under the sickness and maternity scheme forming part of the system in question, the benefits were the same for all beneficiaries, even though contributions were proportional to income; under the pension scheme, retirement pensions were funded by workers in employment; furthermore, the statutory pension entitlements were not proportional to the contributions paid into the pension scheme; finally, schemes with a surplus contributed to the financing of those with structural financial difficulties. That solidarity made it necessary for the various schemes to be managed by a single organisation and for affiliation to the schemes to be compulsory.
79 In contrast, in Fédération Française des Sociétés d'Assurance, cited above, the Court held that a non-profit-making organisation which managed a pension scheme intended to supplement a basic compulsory scheme, established by law as an optional scheme and operating according to the principle of capitalisation, was an undertaking within the meaning of Article 85 et seq. of the Treaty. Optional affiliation, application of the principle of capitalisation and the fact that benefits depended solely on the amount of the contributions paid by the beneficiaries and on the financial results of the investments made by the managing organisation implied that that organisation carried on an economic activity in competition with life assurance companies. Neither the social objective pursued, nor the fact that it was non-profit-making, nor the requirements of solidarity, nor the other rules concerning, in particular, the restrictions to which the managing organisation was subject in making investments altered the fact that the managing organisation was carrying on an economic activity.
80 The question whether the concept of an undertaking, within the meaning of Article 85 et seq. of the Treaty, extends to a body such as the sectoral pension fund at issue in the main proceedings must be considered in the light of those considerations.
81 The sectoral pension fund itself determines the amount of the contributions and benefits and the Fund operates in accordance with the principle of capitalisation.
82 Accordingly, by contrast with the benefits provided by organisations charged with the management of compulsory social security schemes of the kind referred to in Poucet and Pistre, cited above, the amount of the benefits provided by the Fund depends on the financial results of the investments made by it, in respect of which it is subject, like an insurance company, to supervision by the Insurance Board.
83 In addition, as is apparent from Article 5 of the BPW and Articles 1 and 5 of the Guidelines for exemption from affiliation, a sectoral pension fund is required to grant exemption to an undertaking where the latter has already made available to its workers for at least six months before the request was lodged on the basis of which affiliation to the fund was made compulsory, a pension scheme granting them rights at least equivalent to those which they would acquire if affiliated to the fund. Moreover, under Article 1 of the abovementioned Guidelines, that fund is also entitled to grant exemption to an undertaking which provides its workers with a pension scheme granting them rights at least equivalent to those deriving from the fund, provided that, in the event of withdrawal from the fund, compensation considered reasonable by the Insurance Board is offered for any damage suffered by the fund, from the actuarial point of view, as a result of the withdrawal.
84 It follows that a sectoral pension fund of the kind at issue in the main proceedings engages in an economic activity in competition with insurance companies.
85 In those circumstances, the fact that the fund is non-profit-making and the manifestations of solidarity referred to by it and the intervening governments are not sufficient to deprive the sectoral pension fund of its status as an undertaking within the meaning of the competition rules of the Treaty.
86 Undoubtedly, the pursuit of a social objective, the abovementioned manifestations of solidarity and restrictions or controls on investments made by the sectoral pension fund may render the service provided by the fund less competitive than comparable services rendered by insurance companies. Although such constraints do not prevent the activity engaged in by the fund from being regarded as an economic activity, they might justify the exclusive right of such a body to manage a supplementary pension scheme.
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The third question
88 By its third question, the national court seeks essentially to ascertain whether Articles 86 and 90 of the Treaty preclude the public authorities from conferring on a pension fund an exclusive right to manage a supplementary pension scheme in a given sector.
89 The Netherlands Government contends that the order making affiliation compulsory has the sole effect of requiring workers in the sector concerned to be affiliated to the Fund. The order does not, in its view, confer on the Fund an exclusive right in the area of supplementary pensions. Nor does the Fund hold a dominant position within the meaning of Article 86 of the Treaty.
90 It must be observed at the outset that the decision of the public authorities to make affiliation to a sectoral pension fund compulsory, as in this case, necessarily implies granting to that fund an exclusive right to collect and administer the contributions paid with a view to accruing pension rights. Such a fund must therefore be regarded as an undertaking to which exclusive rights have been granted by the public authorities, of the kind referred to in Article 90(1) of the Treaty.
91 Next, it should be noted that according to settled case-law an undertaking which has a legal monopoly in a substantial part of the common market may be regarded as occupying a dominant position within the meaning of Article 86 of the Treaty (see Case C-179/90 Merci Convenzionali Porto di Genova [1991] ECR I-5889, paragraph 14, and Case C-18/88 GB-Inno-BM [1991] ECR I-5941, paragraph 17).
92 A sectoral pension fund of the kind at issue in the main proceedings, which has an exclusive right to manage a supplementary pension scheme in an industrial sector in a Member State and, therefore, in a substantial part of the common market, may therefore be regarded as occupying a dominant position within the meaning of Article 86 of the Treaty.
93 It must not be forgotten, however, that merely creating a dominant position by granting exclusive rights within the meaning of Article 90(1) of the Treaty is not in itself incompatible with Article 86 of the Treaty. A Member State is in breach of the prohibitions contained in those two provisions only if the undertaking in question, merely by exercising the exclusive rights granted to it, is led to abuse its dominant position or when such rights are liable to create a situation in which that undertaking is led to commit such abuses (Höfner and Elser, cited above, paragraph 29; Case C-260/89 ERT [1991] ECR I-2925, paragraph 37; Merci Convenzionali Porto di Genova, cited above, paragraphs 16 and 17; Case C-323/93 Centre d'Insémination de la Crespelle [1994] ECR I-5077, paragraph 18; and Case C-163/96 Raso and Others [1998] ECR I-533, paragraph 27).
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105 The supplementary pension scheme at issue in the main proceedings fulfils an essential social function within the Netherlands pensions system by reason of the limited amount of the statutory pension, which is calculated on the basis of the minimum statutory wage.
106 Moreover, the importance of the social function attributed to supplementary pensions has recently been recognised by the Community legislature's adoption of Council Directive 98/49/EC of 29 June 1998 on safeguarding the supplementary pension rights of employed and self-employed persons moving within the Community (OJ 1998 L 209, p. 46).
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108 If the exclusive right of the fund to manage the supplementary pension scheme for all workers in a given sector were removed, undertakings with young employees in good health engaged in non-dangerous activities would seek more advantageous insurance terms from private insurers. The progressive departure of `good' risks would leave the sectoral pension fund with responsibility for an increasing share of `bad' risks, thereby increasing the cost of pensions for workers, particularly those in small and medium-sized undertakings with older employees engaged in dangerous activities, to which the fund could no longer offer pensions at an acceptable cost.
109 Such a situation would arise particularly in a case where, as in the main proceedings, the supplementary pension scheme managed exclusively by the Fund displays a high level of solidarity resulting, in particular, from the fact that contributions do not reflect the risk, from the obligation to accept all workers without a prior medical examination, the continuing accrual of pension rights despite exemption from the payment of contributions in the event of incapacity for work, the discharge by the Fund of arrears of contributions due from an employer in the event of insolvency and the indexing of the amount of pensions in order to maintain their value.
110 Such constraints, which render the service provided by the Fund less competitive than a comparable service provided by insurance companies, go towards justifying the exclusive right of the Fund to manage the supplementary pension scheme.
111 It follows that the removal of the exclusive right conferred on the Fund might make it impossible for it to perform the tasks of general economic interest entrusted to it under economically acceptable conditions and threaten its financial equilibrium.